When a Silkies “target” checks her mailbox and sifts through the bills and advertisements, Pat Corpora hopes she sets eyes on his tempting offer first.
“You qualify for an instantly slimming, beautifully shaping, supremely comfortable free pair of panty hose,” a Mylar mailer announces.
Who could resist?
“It’s a great promise,” says Corpora, chairman, president and CEO of HCI Direct Inc., a direct marketing company that has served the women’s market with products including Silkies panty hose for 30 years.
“The most beautiful legs in the world wear Silkies,” announces an all-caps tagline situated under Silkies’ curvaceous logo.
Direct marketing is an intimate, effective way to reach potential customers and deliver quality service to repeat clients, Corpora says. And with 2 million customers enrolled in Silkies home-delivery service and a 5 percent response rate — double the national average for catalogue sales — Silkies has a leg up on the hosiery market as the largest direct-mail brand.
“People often think of direct-response marketing as a shot-gun approach,” says Corpora. “But the approach we take is very laser-like.”
The 7,000 women who sent back their response cards in January to try out Silkies’ luxury threads are evidence that when the right message lands at the right address, revenue returns to the sender. HCI Direct brings in $245 million each year for its efforts.
Information central
Corpora is practiced at executing the direct effect. He joined HCI Direct two years ago after leaving a position as senior vice president of marketing for America Online. His short tenure at the technology giant capped a 20-year career at Rodale Inc., a publishing company recognized for its health and fitness titles.
Corpora joined Rodale in 1980 as a project accountant, rising to president of its book division, where he grew the $30 million department with a “checkered past” into a revenue and profit leader that broke $250 million before he left in 2000.
“In direct marketing, you can adapt quickly to selling different products,” Corpora says, adding that panty hose, magazines and Internet service aren’t all that different — really. “It’s a different audience and message, but the process, list selection, [demographic] segmentation and the way people buy is pretty consistent.”
A veteran of Rodale’s circulation circuit, Corpora’s learned lessons from hit-and-misses that have helped him understand the critical success factors for direct marketing. Sales pitches are different, methodology is the same.
First, a winning direct-response campaign marries statistics and style — numbers and words. Interpreting information into a selling proposition is much different than adding up numbers and regurgitating economic data. The process requires creative and analytical mindsets.
“You have to have the right and left brains working,” Corpora says. “If you are just math, you will not be successful because you need compelling copy to get people to respond. On the other hand, if you can’t interpret the numbers, your ideas economically won’t work for you.”
Then, Corpora picked up pointers on the power of personalization.
“I learned that by testing different headlines and different formats, you could greatly increase your response rate,” he says. “The beauty of direct marketing is you can have multiple messages going to multiple people.”
He watched response rates climb when he experimented with snappy come-ons while working as a marketing manager at Rodale.
Corpora applies these philosophies to HCI Direct’s campaigns, which explains the Mylar mailer that generated a 50 percent increase in response rate when the company introduced it five years ago.
Meanwhile, to craft messages that stick, HCI Direct mines its databases. Details matter — even size matters. For example, women who slide into petites look for style; ladies who order extra-large sizes want comfort. These two groups will read different literature from Silkies with compelling statements that speak to their needs.
By scrutinizing demographic data, digging through customer list statistics for clues to buying preferences and identifying potential clients based on geography, age, occupation, interests and particulars such as leisure reading preferences, Corpora can narrow a mammoth circulation list to a digestible group of likely Silkies shoppers.
These women are generally middle-aged traditionalists with formal social obligations and conservative professional dress codes — “Women from the Carolinas as opposed to women from California,” Corpora says.
In fact, 300,000 such women have purchased 20 or more items from Silkies; 50,000 have received more than 100 hosiery shipments. And once women send in for their free Silkies sample, HCI Direct converts 25 percent of them into repeat customers, Corpora says.
HCI Direct pursues three types of customers in three different ways: it coddles its current shoppers, it asks former buyers if they will invite Silkies back and it prospects noncustomers who fit its specific demographic target.
“We use a sophisticated modeling system,” Corpora says. “We build progression models and have access to statisticians.”
Here, too, Silkies tweaks its inserts and customizes its benefits depending on where a shopper falls on the loyalty scale. It asks those who purchase four items per month if they are interested in increasing their shipment frequency. It bolsters veteran customers’ buying power through rewards programs. And customer service staff fields queries and calls on cancelled accounts to see if the service was unsatisfactory.
Most retailers don’t dig this deep.
“I like our position,” Corpora says. “We don’t position ourselves against the discounters, like Target or Wal-Mart, because we’re not going to win on price. We position ourselves against department stores. That is where we compete very well on price, quality and, of course, selection.”
As hosiery departments in these stores have evaporated into scant displays with fewer choices, Silkies captures shoppers who regularly purchase panty hose, seek different colors and styles, and appreciate the regular shipment so they can avoid rummaging through stock and the risk of returning home empty-handed.
Corpora’s main concern is winning the mailbox competition.
“We just need to stand out among all the other mail in there,” he says. “If they pick up their cable bill instead of our package, we might lose an opportunity.”
Corpora likes to reach customers with words rather than dinner-time phone calls, radio announcements or department store displays. He prefers to know exactly who will find Silkies’ promotions in their mailboxes.
“We have the luxury of having a lot of information on our customers,” he says. “Silkies has always been recognized as a quality, valuable brand. And since we are in direct marketing, brand is more about the service and relationship people have with our company.”
Mail appeal
Six months after joining HCI Direct, Corpora knew he had encountered the most complex marketing obstacle of his career so far.
Hosiery is as hip as a petticoat in some markets, making it a challenging product to market. Today’s lax dress codes and jeans-attire social functions force companies like Silkies to churn out new products that fit modern tastes — vibrant colors, opaque and cable varieties, and even hose with rose tattoos.
“I realized after working here for a while that this job is really hard,” he says.
For years, Corpora had mastered marketing strategies for products that people demanded.
“At Rodale, we were in health and fitness, and AOL was Internet service,” he says. “These are two industries that have the wind to their backs — people are interested in health and are jumping on the Internet. It was easy to sell.”
Panty hose are a different story.
“We work in an industry where there is a declining market and we are trying to reinvent a selling model where the customer has more flexibility,” he says.
While Corpora stimulates his team to i
nv
ent strategies to catch the attention of customers, he also must convince employees that they can and should participate in driving the company forward and sending Silkies’ message to customers.
“We have to make a compelling statement that our selection, flexibility and value is better than what customers can get anywhere else,” Corpora says.
Realizing the task at hand, Corpora mentally pages through lessons learned that have helped him sculpt HCI Direct’s corporate culture. From AOL: Approach projects with a sense of urgency. “If things aren’t selling, how can we make it happen?” he says.
Question everything — and then ask more questions.
From Rodale: Value your products, value your people.
“If you don’t have a great product, you can trick people for a short time,” he says. “But you will eventually lose your audience. Put the product first. Also, I think it’s valuable and important to create an organization that cares about its people.”
Finally, think long-term and develop a game plan with strategy that reaches beyond the next couple of quarters.
Cultural fabric
Corpora describes HCI Direct as a participatory, goal-driven workplace. Employees speak up, and are held accountable. They are encouraged to innovate and perform, then celebrate the company’s progress and success.
But it wasn’t always that way.
“The culture has evolved greatly over the past two years,” Corpora says, calling the company “somewhat autocratic” when he joined.
“That’s not good or bad,” he says, “but it gives you a certain type of culture,” one that can settle into complacency.
“It wasn’t that employees didn’t try, but the message from management was, ‘We’ll tell you what to do,'” Corpora says.
And when he asked workers why they did a task a particular way or why they carried out a project just so, they replied matter-of-factly, “Because that’s the way it was always done.”
Enough said for Corpora. The key to winning the mailbox competition, enticing new customers and delivering dependable service is developing a seamless operation behind the scenes, he says, so he developed a three-year plan he presented to the board before he took over as CEO.
He examined the company’s inner workings and found that nearly every service was done in-house. That included manufacturing, which left HCI Direct as one of the few thriving textile houses in the United States. Three facilities in the Carolinas employ 400 workers, who buy yarn, knit, sew, package and ship Silkies to customers.
When HCI Direct occasionally outsources work, the defect rate is 25 percent; when it’s done in-house, 5 percent of hosiery is defective. It’s just not worth it to send sewing overseas, he says.
“I first thought, ‘I can’t believe we are competing by making our own panty hose,'” Corpora says.
Shareholders asked the same question when Corpora reviewed with them the company infrastructure.
“Does that make sense?” they wondered.
“I can prove to them that it does, and it’s an advantage,” Corpora says. “The people who run our plants in the South are very determined to keep that business (and 400 jobs), and labor is only 30 percent of the overall cost.”
At the same time, Corpora carefully reviewed the responsibilities of the managers.
“We set up more formal review processes where managers and employees are accountable and responsible for evaluations,” he says. “We set up incentive plans.”
He also launched management training that includes personality tests to ensure team members understand how to communicate with one another.
Because the organization’s in-house staff encompasses departments that include postage and shipping, accounting and finance, marketing and creative, and IT and statisticians, facilitating uncluttered information flow is essential. Designing goals and pinpointing expectations helps HCI Direct run as a cohesive entity rather than as a compartmentalized, function-driven company.
“There is a very nice buzz in the organization,” Corpora says. “Everyone knows their job is to serve the customer, and it keeps us all very focused.”
What’s in store
Corpora’s efforts have focused on HCI Direct’s core Silkies line, but the ambitious CEO envisions an online storefront with other offerings. Eventually, the company’s direct-response approach will test items besides textiles, he says.
“My goal is to transfer HCI from being a hosiery company to being a direct-marketing company that serves the women’s market,” Corpora says.
He says the Silkies brand is strong but not fast-growing, and to grow, HCI Direct must leverages its best-selling brand and offer different products.
“We have 10 (million) to 15 million customers who have bought from us in the last five years, and we will still have a relationship with those people in some way,” he says.
Already, HCI Direct’s Web site introduces customers to accessories, bath and body products, jewelry and sleepwear. This, Corpora figures, is just the beginning. Potential shoppers are tapped, databases are built and information is plentiful.
And while Corpora concentrates on maintaining a strong, competitive hosiery business he hopes fresh endeavors will provide aggressive profit and revenue growth to the $245 million organization.
And in a business where information is central, HCI Direct is in the know.
“There is one thing about Silkies,” Corpora says. “We know everyone’s size.”
How to reach: HCI Direct, (215) 244-1777 or www.silkies.com
